Stimulus checks actually kept used car prices down because everyone used them to trade in their old rides.
SSRN · March 18, 2026 · 6425006
The Takeaway
While many blame pandemic 'stimulus checks' for the hyper-inflation of used car prices, researchers found the payments were responsible for less than 20% of the spike. By pushing households to buy new cars, the stimulus actually increased the supply of used trade-ins, which helped prevent used car prices from rising even higher than they did.
From the abstract
How does fiscal stimulus affect durable goods sales and to what extent does stimulus drive inflation? We study this question in the context of how the unprecedented pandemic fiscal stimulus affected household car purchases and auto prices. Using administrative data on vehicle registrations, we exploit the timing of nearly $900 billion in stimulus payments and geographic differences in program exposure to identify causal effects on sales. We find the stimulus increased purchases by 5.5 million ve